What We're Reading
Here's a selection of articles, updates and newsletters we've enjoyed. We think you'll find them informative and helpful. If you have any questions after reading what's here, please don't hesitate to contact us.
In Search of Alternatives
We continue to do a lot of work trying to find great investments in the alternative space. This White Paper on private debt written by Bayshore Capital highlights a few of the areas we are studying and why they might be useful additions to a portfolio.
Beware of the Shiny Lure
A short but great story relayed by Scott Barlow of the Globe and Mail about Charlie Munger, one of the greatest investors on earh.
Charlie Munger is the less visible half of the Buffett-Munger partnership at the head of Berkshire Hathaway. One of the wisest investors of all time, Mr. Munger also told what could be my favourite investing story ever.
Mr. Munger was once at a fishing convention and saw a large crowd of people around a man selling brightly coloured fishing lures. He asked the vendor if the bright colours really helped catch fish and the guy answered, “Mister, I don’t sell to fish.”
If we equate the bright colours to investment ideas and number of fish caught to investment returns, the story has obvious implications for the brokerage industry. Brokers’ profits remain dependent on investor transactions to a significant degree, and there will never be a shortage of shiny new products or trade ideas designed more to sell well than generate strong long-term returns.
Mr. Munger’s fishing lure analogy also has much wider implications that depend on investor tendencies. A value investor, for instance, might find an ultra-cheap stock attractive, and fail to notice the company is in terminal decline, with no catalysts to put it back on a growth path.
Investors should take a step back when they see an investment that looks ‘shiny’ – the odds of being deceived, or deceiving themselves, can be high.
-- Scott Barlow
Lower Expected Returns Ahead
Click Here to read a very interesting perspective on how it might be dangerous to assume that Equity and Fixed Income markets will generate returns equal to those of the past 20 years.
Beware of 'Texas Sharpshooters'
Here's an article from Myles Zyblock, Chief Investment Strategist at Dynamic Funds who is one of our favorites. In it, Myles discusses how easy it can be to draw false correlations from increasingly overwhelming amounts of data now available to us, and stresses the importance of making informed investment decisions with proper and time-tested fundamentals.
Click here to read Myles' thoughts.